Competitive isomorphism & US/China policy convergence

The long-held hope in the US (and beyond) had been that China would converge towards a Western-style economic and political model as it integrated into the global economy.  But over the past decade there has been a growing understanding that China will not converge, and is set up in in explicit competition to the US.  Mr Xi believes that ‘The east is rising, while the west is declining’.

But even as the belief in Chinese policy convergence has waned, in several respects the US has moved towards Chinese-style economic policies over the past decade.  This is a structural shift, started under President Trump and strengthened by the Biden Administration: trade and investment restrictions, aggressive industrial policy, decoupling/derisking, and an increased focus on national security. 

This is a ‘competitive isomorphism’ dynamic: entities that are engaged in strategic competition with each other tend to become more like each other on key dimensions as they seek to strengthen their position – even if their starting point is of fundamental difference.  Indeed, the US and China have very different interests, values, and worldviews.  But strategic economic competition creates pressure for imitation of some economic policy behaviours. 

One implication is that recent changes in US economic policy are structural, a function of intensifying strategic economic competition between the US and China, not simply a reflection of the policy preferences of a particular Administration – and are likely to continue.  There are several domains in which this is the case.

The full note is available at: https://davidskilling.substack.com/p/competitive-isomorphism-and-uschina